Banks witness low credit growth due to coronavirus-induced lockdown
Banks witness low credit growth due to coronavirus-induced lockdown
BusinessToday.In
- May 21, 2020,
- Updated May 21, 2020 8:07 PM IST
- 1/8
As of April 30, 2020, the outstanding aggregate bank credit amounted to Rs 102.7 lakh crore, Rs 1.03 lakh crore lower than March-end 2020. The incremental bank credit off take contracted in April 2020 by 1 per cent. The low bank credit growth can be attributed to the risk aversion of banks to lend as well as the suspension of business and commerce due to the lockdown.
Story by Shivani SharmaDesign by Pragati Srivastava
- 2/8
Amidst a slowdown in the economy, bank credit of gems and jewellery contracted by 20 per cent in FY20 as compared to last fiscal.
- 3/8
Credit flow to glass & glassware industry dipped by 11 per cent in FY20. It was also downgraded in FY19 as the growth dipped by 17 per cent.
- 4/8
Engineering, cement and cement products, construction and infrastructure products industry saw a major downfall in credit off take in FY20 as compared to FY19. It fell to 7 per cent from a growth of 9.5 per cent in the previous fiscal.
- 5/8
In terms of sectoral credit offtake during 2019-20, the industrial sector of metal witnessed negative bank credit growth of -5.7 per cent compared with the 10.7 per cent negative growth a year ago.
- 6/8
The slowdown has been attributed to negative growth of credit to micro, small and medium enterprises and textiles industry. The credit went negative with 5.5 per cent fall from last fiscal. It is expected to fall further in the current fiscal also.
- 7/8
Industries like food processing, chemicals and chemical products, vehicles, vehicle parts and transport equipments registered lower credit growth in FY20 with -1.9 per cent compared to last year's growth of 1.1 per cent.
- 8/8
Construction work in the country has come to a standstill as the nationwide lockdown to combat COVID-19 pandemic kicked in, triggering concerns that the companies would see revenues being hurt and may even incur losses on some projects. Infrastructure credit contracted by 0.2 per cent from a healthy growth of 18.5 per cent in FY19.